Tuesday, December 23, 2008

Comment on fighting poverty in the US

Rebecca Blank of the Brookings Institution has some strategies that the next administration in the US could work on to fight poverty in the states. Our clip of the essay comes from McClatchy newspapers.

Holidays should be a time of blessing. But this year, with unemployment rising, more families are feeling squeezed rather than blessed. A sound plan from the new White House to support low-wage workers, ensure an effective safety net and create opportunities in high-poverty neighborhoods might guarantee American families more on their tables in the seasons ahead.

One in eight Americans lived in families with income below the official U.S. poverty level in 2007. As 2008 wraps up in a deepening economic recession, many more families are finding it difficult to pay the bills that cover the costs of food, clothing and shelter. The ability to cope with medical bills, transportation and child care costs must also be part of the modern-day basic survival package.To understand the problems of poverty, it is important to identify accurately who is poor. Unfortunately, our current poverty measure is seriously outdated. The current thresholds for measuring whether a family is in poverty are based on 50-year-old data about food consumption, updated only for inflation since the Johnson administration established the poverty measure.

If Barack Obama is serious about waging a new war on poverty, a good start would be to consider a more effective way to measure poverty that better indicates how many families have sufficient economic resources to pay for their basic necessities. In a developed country like the United States, this means more than merely avoiding starvation or homelessness; it means having the resources needed to seek and hold employment.

In a new Hamilton Project discussion paper, Mark Greenberg and I recommend the adoption of an improved measure, drawing from the recommendations of the National Academy of Sciences, which would better define a poverty line and better measure the actual amount households have to spend on the necessities of food, clothing and shelter.

The new measure would provide a more accurate picture of poverty in America and a better understanding of the effectiveness of antipoverty programs. Combating contemporary poverty, however, also requires a rapid-action plan.

For a major political win early in the Obama administration, his policy advisers should propose expanding the Earned Income Tax Credit for low-wage workers without children. Currently, only working parents who live with their children can receive an EITC that is large enough to matter. We need to "make work pay" for all low-wage workers, including less-skilled men who do not live with their children but still have child-support obligations.